CO129-588-24 China- British extra-territorial rights- negotiations with China 23-11-1942 - 1-1-1943 — Page 166

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connexion with the coasting trade and inland navigation in waters of the Republic of China and that, while the Government of the Republic of China reserves the right to limit the coasting trude and inland navigation to the Chinese flag, the Government of the Republic of China does not contemplate applying restrictions which would have the effect of making material alterations in the existing practice pending the making of further arrangements between the two Governments. It is further understood that it is the concept and intention of the Government of the Republic of China and the Government of the United States of America that questions in regard to coasting trade and inland navigation will be resolved on the basis of what is normal and usual in modern international practice between friendly countries.

It is mutually understood that questions which are not covered by the present treaty and exchange of notes and which may affect the sovereignty of the Republic of China shall be discussed by representatives of the two Governments and shall be decided in accordance with generally accepted principles of international law and wit modern international practice.

If the Chinese suggestion of a reference to a restriction on the right of alienation of existing rights and titles to real property is included in Article IV1/ With reference to Article IV of the treaty, the Government of the Republic of China hereby declares that the restriction on the right of alienation of existing rights or titles to real property referred to in that article will be applied by the Chines) authorities in an equitable manner and that if and when the Chinese Government declines to give assent to a proposed transfer the Chinese Government will, in a spirit of Justice and with a view to precluding loss on the part of American nationals whose interests are affected, undertake, if the American party in interest so desires, to take over the right or title in question and to pay adequate compensation therefor.

It is mutually under-tood that the orders, decrees, Judgments, decisions and other acts of the United States Court for China and of the Consular Courts of the United States of America in China shall be considered as res judicata and shall, when necessary, be enforced by the Chinese authorities. It is further understood that any cases pending before the United States Court for China and the Consular Courts of the United States of America in China at the time of the coming into effect of this treaty shall, if the plaintiff or petitioner so desires, be remitted to the appropriate courts of the Government of the Republic of China which shall proceed as expeditiously as possible with their disposition and in so doing shall in so far as practicable apply the laws of the United states of America.

I shall be much obliged if Your Excellency will confirm the foregoing.

I avail myself of this opportunity to renew to Your Excellency the assurances of my highest consideration.